Top Car Leasing Questions Answered
Do you want to know what is vehicle leasing? or how does leasing a vehicle work, then you’re in good company. Not everyone is familiar with all the pros and cons of leasing a car. In fact, there are a good number of auto leasing options available these days.
Generally speaking, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed period of time. Automotive dealerships offer vehicle leasing as an alternative to traditional auto purchase or financing. It is often used by companies when acquiring a company vehicle. In general, leasing costs less than buying, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to lease or buy a car.
Today we are going to look at our ten most frequently asked questions regarding auto leasing.
1) Is It Better to Lease or Buy a Car?
Deciding whether to lease or buy depends on many factors. If you drive a lot of miles annual and like to keep your vehicles for longer than three years, leasing won’t be very beneficial for you. However, if you enjoy getting a new car every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Basically, the difference between auto leasing or buying really comes down to your financial, automotive, and personal priorities.
Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it’s already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.
2) Car Leasing – Is It a Good Idea?
The benefits of leasing a car are unique. You cannot get them with other auto financing offers. These benefits include lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. For even more details on the benefits of car leasing, our car finance department is waiting to answer all of your questions.
3) What Does It Cost to Lease a Car?
If you’re wondering how much does it cost to lease a car, the good news is that it’s negotiable. Most dealerships and manufacturers offer zero-down lease deals. Of course, there are varying factors that qualify or disqualify customers from these kinds of leases. Factors like credit scores, credit payment history, etc. Just don’t forget that paying nothing down typically means greater monthly payments. Car leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
4) Can You Lease a Used Car?
Yes, you actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among car dealers but most do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles.
5) Can One Get a Deposit Back On Vehicle Leasing?
Usually a deposit is only refundable at the end of the lease. At least this is true when all leasing contract obligations have been met. Keep in mind that a deposit (a.k.a. a security deposit) is not the same thing as a down payment. Down payments are not refundable but security deposits typically are. Also note that some leases require non-refundable deposits. Therefore, read your lease agreement diligently and ask questions before you sign on the dotted line.
6) Can One Purchase the Lease Vehicle?
The majority of auto lease contracts have buy-out clauses in them in case you fall in love with your car and decide to finance it. Keep in mind the purchase price of the car may vary. This depends on the residual value of the vehicle after the lease agreement has expired. There are also options to purchase your leased vehicle prior to the completion of the contract. For this, however, you will need to speak with a leasing manager. Only they can provide these buy-out details and take care of any early termination fees that may apply.
7) Is It Possible to Lease a Car with Any kind of Credit & 0 Down?
While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don’t worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team./p>
8) What Kind Of Credit Score Do You Need To Lease A Car?
Typically, a credit score of 619 or lower is classified as “subprime”. While a subprime borrower won’t typically be automatically declined, a credit score lower than 619 means you will likely have to pay a higher interest rate and/or down payment. There are various steps you can use to improve your credit score like making on-time payments, consistent employment history, and applying for loans too many times.
9) May I Return My Lease Vehicle to a Different Dealership?
Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It’s probably obvious, but you can’t turn a leased car into any other brand of dealership. You can, however, turn your leased Ford into any authorized Ford dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
10) Is Maintenance Included With My Car Lease?
Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Of course, specifics will vary within specific lease contracts, but most leases will cover your leased vehicle’s normal maintenance and service needs. These include filter and fluid changes, normal tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.